Changing Channel Conflict for Manufacturers

The annual Internet Retailer Conference and Exhibition is happening in Boston this week, and while Elastic Path is not there this year, we have a ton of video evidence of our visit last year as Jason Billingsley made his rounds of the trade show floor interviewing a wide range of ecommerce vendors.

One must-see video if you’re a manufacturer is Jason’s interview with Shopatron‘s CEO Ed Stevens:

One of the biggest roadblocks for manufacturers when selling online is channel conflict. Many manufacturers have their hands tied when selling direct to consumers because their retail partners may retaliate (or retailiate?) To handle channel conflict issues, manufacturers’ website either sell no product, a limited product line or just accessories to keep retail partners happy. With 50-60% of customers looking for branded product beginning their search at the manufacturer’s website – that’s a lot of missed opportunity for both the manufacturer and retail partner. It also hurts the customer who has to find the product elsewhere.

What Stevens’ company Shopatron does is allow manufacturers to offer a full product line for sale on their websites, with retailers as fulfillment partners. Customers can even choose to pick up the product at the local retailer, which is an opportunity for the retail partner to sell even more product to that consumer — 1 in 4 customers will end up buying more stuff when they come by to pick up their order. Stevens reports 55% of Shopatron customers choose the in-store pickup option.

In the future, it will be interesting to see if services like Shopatron can provide in-store pickup options through interactive TV advertising widgets (as discussed in our Multichannel 2.0 webinar). It’s common for manufacturers to advertise on TV, but so far there hasn’t been an instant gratification service for the customer or a way for the manufacturer to solicit a direct response. Perhaps Shopatron and Alvenda should chat.

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